SUPERVISOR’S CERTIFICATE

This is to be certified that the Project “INTERNET

BANKING” is the work of “NISHI” Roll Number
210237303021 Batch 2021-2024 who carried out the
project work under my supervision for the partial
fulfilment of B.com(nep).

To the best of my knowledge and belief the data &

information Presented by Him/Her in the project has not
been submitted earlier.

Signature of the guide:

Name: Mr. Deepak Kumar
(Faculty of Management)

1
 STUDENT DECLARATION

I hereby declared that the project work

which the title of “Internet Banking” submitted by me
for the partial fulfilment of the degree of B.com (Nep)
under the CCS University is my own original work and
has not been submitted earlier to any other university for
the fulfilment of the requirement for any other degree.

I do hereby also declare that no

chapter of this manuscripts in whole or in part has been
incorporated in this Report from any earlier book or work
done by other or by me. However extract of any literature
which has been used for this report has been duly
acknowledge providing detail of such literature in this
reference.

Place: Ghaziabad Signature:

Date: Name: Nishi
Address: 89,3rd a Nasarpur
Phatak
Roll No: 210237303021

2
 ACKNOWLEDGEMENT

While conducting the industry Internet Banking

Oriented Project, innumerable people have given me
various suggestions and opinions while conducting the
Internet Banking Oriented Project. I have tried to
incorporate all those suggestions which are really
relevant in preparing my final report. I think it is
essential to thanks all those who have contributed and
helped me throughout the duration of the project.

I pay my immense gratitude to Prof. MR.

“DEEPAK KUMAR” faculty of our college for his
continuous and deliberate discussion on the topic and
indeterminable burden taken by him in helping me
through conducting the project.

I would also like to thank my friends who rendered their

wholehearted co-operation in the successful completion
of the project work.

Finally, I am thankful to all the people who responded to

the questionnaire and their contribution has been
invaluable. This project would not have been completed
without their participation.

3
I am pleased to state that the whole report is just the
presentation of the facts that have been found during the
project through different sources and its each sentence is
an exact representation of the information obtained and
the analysis thereof. I hope that I have manifested my
since attempts to represent all the information and other
things to the best of my ability.

NISHI
Mahalaxmi College for Girls
ROLL NO:- 210237303021

INDEX
4
SERIAL CONTENTS PAGE NO.
NO.
Chapter- Introduction 8-23
1
1.1 Background 8-9
1.2 History 9-18
1.3 Objective of the study 19
1.4 Review of literature 19-20
1.5 Database & methodology 20-21
1.6 Limitation of study 21-22
1.7 Chapter planning 22-23

Chapter- Internet banking an overview 24-33

2
2.1 Definition 24-25
2.2 How internet banking evolved 25-27
into mainstream financial tool
2.3 Features of internet banking
2.4 Advantages of internet 27-30
banking 30-32
2.5 Disadvantages of internet
32-33
banking
Chapter- Different types of internet banking 34-56
3
3.1 Core banking solution 34-37
3.2 ATM banking 38-39
3.3 Digital wallet 39-40
3.4 Digital cash 40-41
3.5 Kiosk banking 42
3.6 NEFT 43-45
3.7 RTGS 45-46

5
 3.8 IMPS 46-48
3.9 Mobile banking 48
3.10 Smart card 49
3.11 Green channel counter 49-50
3.12 E-ticketing 50-51
3.13 Demat service 51-53
3.14 E-tax 53-54
55
3.15 Online demand draft
56
3.16 other services
Chapter- Security issue of net banking 57-66
4
4.1 Introduction 57-58
4.2 Types of frauds 58-60
4.3 Steps to secure internet 61-63
banking
4.4 Ten steps to minimize 63-66
security
issues
Chapter- Internet banking in Indian- 67-70
5 guidelines by RBI
5.1 Guidelines to RRBs 67-68
5.2 Authentication practices to 68-70
internet banking
Chapter- Internet banking scenario with 71-73
6 Indian economy
6.1 Internet banking scenario 71-72
6.2 Initiative taken by the 72-73
government of India
Chapter- A case study of internet banking 74-76
7

6
 7.1 Data analysis and 75-76
interpretation
Chapter- Findings, Conclusion and 77-87
8 Recommendation
8.1 Findings 77-78
8.2 Conclusions 79
8.3 Recommendation 80-87
Chapter- Bibliography 88
9
9.1 Websites 88
9.2 Books 88

CHAPTER-1

7
 INTERNET BANKING
INTRODUCTION

1.1.BACKGROUND
Electronic banking, or e-banking, is the term that describes all
transactions that take place amoung companies, organization,
anmd individuals and their banking institutions. First
conceptulized in the mid-1970s, some banks offered
customers electronic banking in 1985. However, the lack of
internet users, and costs associated with using online banking,
stunted growth. The Internet explosion in the late-1990s made
people more comfortable with making transactions over the
web. Despite the dot-com cash, e-banking grew alongside the
internet.

 Internet banking (or online banking or e-banking)

allows customers of a financial institution to
conduct financial transactions on a secure website
operated by the institution, which can be a retail or
virtual bank, credit union or banking society.

 Online banking is the practice of making bank

transactions or paying bills via the Internet. Thanks
to technology, and the Internet in particular, people
no longer have to leave the house to shop,
communication, or even di their banking. Online
banking allows a customer to make deposits,
withdrawals, and pay bills all with the click of a
mouse.
8
1.2.HISTORY

 Precursors:-
The precursor to the modern online banking services was
distance banking electronically and by telephone since
the early 1980s. The term 'online' became popular in the
late 1980s and referred to the use of a terminal,
keyboard, and TV or monitor to access the banking
system using a phone line. 'Home banking' can also refer
to the use of a numeric keypad to send tones down a
phone line with instructions to the bank.

 Emergence of computer banking:-

The first home banking service was offered to consumers
in December 1980 by United American Bank,
a community bank with headquarters in Knoxville,
Tennessee. United American partnered with Radio
Shack to produce a secure custom modem for its TRS-
80 computer that allowed bank customers to access their
account information securely. Services available in its
first years included bill pay, account balance checks, and
loan applications, as well as game access, budget and tax
calculators and daily newspapers. Thousands of
customers paid $25–30 per month for the service.

9
 Large banks, many working on parallel tracks to
United American, followed in 1981 when four of
New York's major banks (Citibank, Chase
Manhattan, Chemical Bank, and Manufacturers Hanover
offered home banking services, using
the videotex system. Because of the commercial
failure of videotex, these banking services never
became popular except in France (where millions of
videotex terminals (Minitel) where given out by the
telecom provider) and the UK, where
the Prestel system was used.

The first videotext banking service in France was

launched on December 20, 1983, by CCF Bank (now
part of HSBC). Videotext online Banking services
eventually reached 19% market share by 1991.
The developers of United American Bank's first-to-
market computer banking system aimed to license it
nationally, but they were overtaken by competitors
when United American failed in 1983 as a result of
loan fraud on the part of bank owner Jake Butcher, the
1978 Tennessee Democratic nominee for governor and
promoter of the 1982 Knoxville World's Fair. First Tennessee
Bank, which purchased the failed bank, did not
attempt to develop or commercialize the computer
banking platform.

10
  Internet and customer reluctance and
banking:-
When the clicks-and-bricks euphoria hit in the late 1990s, many
banks began to view web-based banking as a strategic
imperative. In 1996 OP Financial Group, a cooperative bank,
became the second online bank in the world and the first in
Europe. The attraction of online banking is fairly obvious:
diminished transaction costs, easier integration of services,
interactive marketing capabilities, and other benefits that boost
customer lists and profit margins. Additionally, online banking
services allow institutions to bundle more services into single
packages, thereby luring customers and minimizing overhead.

In 1995, Wells Fargo was the first U.S. bank to add account
services to its website, with other banks quickly following suit.
That same year, Presidential became the first U.S. bank to open
bank accounts over the internet. According to research by
Online Banking Report, at the end of 1999 less than 0.4% of
households in the U.S. were using online banking. At the
beginning of 2004, some 33 million U.S. households (31%) were
using some form of online banking. Five years later, 47% of
Americans used online banking, according to a survey by
Gartner Group. Meanwhile, in the UK online banking grew from
63% to 70% of internet users between 2011 and 2012.

By 2018, the number of digital banking users in the U.S.

reached approximately 61 percent.[8] The penetration of online
banking in Europe has been increased as well. In 2019, 93
percent of the Norwegian population access online banking sites,
which is the highest in Europe, followed by Denmark and
Netherlands. Across Asia, more than 700 million consumers are

11
estimated to use digital banking regularly, according to a 2015
survey by McKinsey and Company.

By 2000, 80% of U.S. banks offered e-banking. Customer use

grew slowly. At Bank of America, for example, it took 10 years to
acquire 2 million e-banking customers. However, a significant
cultural change took place after the Y2K scare ended.

In 2001, Bank of America became the first bank to top 3 million

online banking customers, more than 20% of its customer base.
[11]
In comparison, larger national institutions, such as Citigroup
claimed 2.2 million online relationships globally, while J.P.
Morgan Chase estimated it had more than 750,000 online
banking customers. Wells Fargo had 2.5 million online banking
customers, including small businesses. Online customers proved
more loyal and profitable than regular customers. In October
2001, Bank of America customers executed a record 3.1 million
electronic bill payments, totaling more than $1 billion. As of
2017, the bank has 34 million active digital accounts, both online
and mobile.[11] In 2009, a report by Gartner Group estimated that
47% of United States adults and 30% in the United Kingdom
bank online.

The early 2000s saw the rise of the branch-less banks as

internet only institutions. These internet-based banks incur
lower overhead costs than their brick-and-mortar counterparts.
In the United States, deposits at some direct banks are FDIC-
insured and offer the same level of insurance protection as
traditional banks. Neobanks are branch-less banks in the United
States which are not FDIC-insured.

12
  First online banking services by region:-
The United Kingdom
Online banking started in the United Kingdom with the launch
of Nottingham Building Society (NBS)'s Homelink service in
September 1982, initially on a restricted basis, before it was
expanded nationally in 1983. Homelink was delivered through a
partnership with the Bank of Scotland and British
Telecom's Prestel service. The system used Prestel viewlink
system and a computer, such as the BBC Micro, or keyboard
(Tandata Td1400) connected to the telephone system and
television set. The system allowed users to "transfer money
between accounts, pay bills and arrange loans... compare prices
and order goods from a few major retailers, check local

13
restaurant menus or real estate listings, arrange vacations...
enter bids in Homelink's regular auctions and send electronic
mail to other Homelink users." In order to make bank transfers
and bill payments, a written instruction giving details of the
intended recipient had to be sent to the NBS who set the details
up on the Homelink system. Typical recipients were gas,
electricity and telephone companies and accounts with other
banks. Details of payments to be made were input into the NBS
system by the account holder via Prestel. A cheque was then sent
by NBS to the payee and an advice giving details of the payment
was sent to the account holder. BACS was later used to transfer
the payment directly.
The United States
In the United States in-home banking was "is still in its infancy"
with banks "cautiously testing consumer interest" in 1984, a year
after online banking went national in the UK. At the
time Chemical Bank in New York was "still working out the bugs
from its service, which offers somewhat limited features". The
service from Chemical, called Pronto, was launched in 1983 and
was aimed at individuals and small businesses. It enabled them
to maintain electronic checkbook registers, see account
balances, and transfer funds between checking and savings
accounts. The other three major banks — Citibank, Chase
Bank and Manufacturers Hanover — started to offer home
banking services soon after. Chemical's Pronto failed to attract
enough customers to break even and was abandoned in 1989.
Other banks had a similar experience.
Since it first appeared in the United States, online banking has
been federally governed by the Electronic Funds Transfer Act of
1978.

France[
After a test period with 2,500 users starting in 1984, online
banking services were launched in 1988, using Minitel terminals
14
that were distributed freely to the population by the
government. By 1990, 6.5 million Minitels were installed in
households. Online banking was one of the most popular
services.
Online banking services later migrated to the Internet.
Japan
In January 1997, the first online banking service was launched
by Sumitomo Bank. By 2010, most major banks implemented
online banking services, however, the types of services offered
varied. According to a poll conducted by Japanese Bankers
Association (JBA) in 2012, 65.2% were the users of personal
internet banking.

China
In January 2015, WeBank, the online bank created by Tencent,
started 4-month-long online banking trail operation.

Australia
In December 1995, Advance Bank acquired by St.George Bank,
started to provide customers with online banking with the
rollout of the C++ Internet banking program.

India
In 1998, ICICI Bank introduced internet banking to its
customers.

Brazil
In 1996, Banco Original SA launched its online-only retail
banking. In 2019 new banks began to emerge as the Conta
Simples, focused only for companies.

15
Slovenia
Virtual or online banking became a reality in Slovenia in 1997,
when SKB bank launched this service under the name of SKB
Net. Two years later, they were followed by the largest Slovenian
bank, NLB bank, who started offering online banking services in
1999 under the name of NLB Klik. Nowadays, actually every
bank in Slovenia is offering online banking services. The
Slovenian Central bank's data shows that there was a rise of
5,1% in 2017 from the previous year and the number almost
doubled from more than ten years ago. At the end of 2019, the
number of users was almost 1 million. The number of payments
is around 26 million per quarter, which means that there are
more than 100 million payments made online in Slovenia every
year, and another 3 million made to offshore accounts. Data
from the Slovenian Central bank also show that the total value of
payments in 2017 reached more than €240 million. More than
900,000 use online banking in Slovenia.

Canada
Virtual banking first became a possibility in 1996 with the Bank
of Montreal's mbanx. Mbanx was released at the very beginning
of the internet banking revolution in Canada and was the first
full-service online bank Also in 1996, RBC started providing
banking information online and had the first personal computer
banking software released that year.
In 1997, the bank ING Direct Canada (now known as Tangerine
Bank) was founded with almost entirely online banking using
only small cafes for meetings and very few physical branches.
This was completely different from how banks had operated in
Canada previously. By the early 2000s, all of the major banks in
Canada rolled out some form of online banking.

16
Ukraine
Remote customer service of banks via the internet or Online
banking (e-banking) in Ukraine was introduced more than two
decades ago. Legal entities have been using the remote control
of bank accounts since the mid-1990s. PrivatBank, which
launched the “Privat24” system in 2000, became a pioneer in
retail online banking.
Since 2000, most financial institutions have been actively
implementing online offices and web banking. 2007 - the
number of Ukrainian banks that introduced Online Banking
exceeded 20. 2018 - the ability to manage accounts and make
transfers online is available in almost all financial institutions in
Ukraine.
Nowadays, the list of Internet banking services, with rare
exceptions, repeats the entire product line of banks. With the
help of Internet banking (IB), you can not only control the
movement of funds in their accounts, but also perform more
complex operations: for example, order a payment card or open
a deposit account, repay the loan, and recently it became
possible to buy and sell currency.
The rapid development of Internet banking in Ukraine is
provoking the growth of Internet users. It is important to
mention that the largest functionality, more than 40 options -
from transfers and opening deposits to home accounting and
purchasing tickets are available in PrivatBank. There are 37
options in the Internet banking system of the First Ukrainian
11111111111111International Bank, 35 - in Alfa-Bank. One of the
most popular services in which Internet banking users are
interested in the ability to pay remotely for utilities.

North Macedonia
Compared to several years ago, when the people living in
Macedonia had to go directly to the banks to perform financial

17
transactions, today there is a widely functional e-banking
system. Macedonian banks today offer conventional e-banking
services, electronic products including debit/credit cards and e-
trading and contemporary electronic services like internet
banking and online investing. What is important when it comes
to e-banking is the trust in banks, usability of the platforms and
the overall marketing for e-banking from banks. Moreover, it's
also important to constantly update the e-banking services. One
successful example regarding the above-mentioned
characteristics in Macedonia is “Stopanska Banka” AD Skopje. In
the country, several factors significantly influence the level of
adoption and usage of e-banking services, such as age, level of
education and complexity of the e-banking services offered by
banks. Naturally, elderly clients use e-banking services less than
younger people. In addition, the level of education has a
significant influence on the level of usage, meaning that the
higher the education level, the more likely is for the citizen to
use e-banking services. As for the satisfaction, citizens are
generally more satisfied with the e-banking services offered by
various banks when they have a diverse portfolio of services and
offer fast and simple completion of transactions.

Cook Islands
The Bank of the Cook Islands introduced online banking in 2015,
under the leadership of Vaine Nooana-Arioka.

1.3. OBJECTIVE OF THE STUDY

The main objective of the study are__

 To understand the genesis and concept of Online-Banking.

18
  To analyse the importance, functions, advantages and
limitation of Online-Banking.
 To explain the different form of Online-Banking and to
analyse the rules & regulation regarding Online-Banking
guided by RBI.
 To highlighting on the security problems of Online-
Banking and how to reduce the security issues with the
help of security control tools.
 To analyse the trend of Online-Banking with the help of
primary data.
 To analyse the present e-banking scenario concerned with
ATM, Internet banking< Mobile banking, credit card-debit
card, funds transfer and other e-banking services.
 To examine the impact of ATM, Internet banking, Mobile
banking and Credit cards on customers satisfaction by
analysing the problems faced by the customers.

1.4. REVIEW OF LITERATUR

 An Introduction to E-Commerce:- written by Ramit
kumar Roy & Debasri Dey and published by the Elegent
Publications.

 E-Commerce:- written by Prof.(Dr.) Dilip Kumar

Chakroborty & Prof. Debdual Chatterjee and published by
B.B. Kundu Grandsons.

19
  Introduction to Information Technology & its
Business Application:- written by A.K. Mukhopadhyay
& A. Das and published by Kalimata Pustakalya.

1.5. DATABASE AND METHODOLOGY

 Data Collection:-

 Primary Source: The study is based on both of

primary and secondary data. For the purpose of
case study primary data have been collected from
the people of GHAZIABAD through phone calls,
social network and direct interview from them.

 Secondary Source: The secondary data have

been collected from different articles & website
resource such as www.wikipedia,com,
www.google.co.in and so many others. We have
used simple pictures, tables, & graphs to analysis
& present the data. Apart from this Ialso followed
my supervisor’s instruction to finish the project.

 Sampling Methodology: The Primary data have been

collected through a survey with a pre-tasted structured
QUESTIONNAIRE on a sample of randomly selected 114
people of GHAZIABAD in which some are college students,
business persons, service holders, working women and some
people who belong to 20-60 age group. From 114 respondents
100 respondents use online banking and the data collected

20
 from those people are used to analysis the trend of Net-
Banking.

1.6. LIMITATION OF THE STUDY

The major limitations of the study are__

 Customer Service:-
Banks don't just enable customers to deposit checks, withdraw
money and transfer funds they also make it easy for you to get
answers to any questions that you might have. That's one area
that online banking trails in. Although some banks have
implemented instant message chatting features on their websites
and offer customer service lines, these communications means
don't compare to the convenience of speaking with a teller or
other banking professional in person.

 Deposit Limitations:-

Many employers have implemented direct deposit, meaning that

pay checks are electronically deposited into an employee's bank
account. But there's other instances when consumers need to
deposit checks or cash they've received. This can't be done
online, unless you have a smartphone and belong to one of the
banks that offer smartphone apps to make deposits. If you don't
own a smartphone or belong to a bank that offers such
technology, the only way to deposit funds is to make a visit to

21
your bank, or, in the case of an online-only bank, use snail mail
to send the deposit in.

 ATM Limitations:-

Using online banking, customers have 24-hour access to their

accounts and are able to transfer funds, make payments and
view bank statements. However, if you need to withdraw cash
for something, that must be done at either your bank location or
at an ATM machine. If you're withdrawing cash at an ATM not
affiliated with your bank, you'll most likely be subject to service
fees. Internet-only banks don't have a network of ATMs, so such
customers can expect to pay ATM fees with every withdrawal.

1.7. CHAPTER PLANNING

The study is divided into six chapters with reference:
 Introduction
 Online Banking An Overview
 Different types of Online Banking
 Online Banking in Indian-Guidelines of RBI
 Growth of online banking in India
 Findings, conclusions & Recommendations
 References
 Bibliography.

22
 CHAPTER-2
INTERNET BANKING- AN
OVERVIEW

23
2.1. DEFINATION
 Online banking is an electronic payment system that
enables customer of a financial institution to conduct
financial transactions on a website operated by the
institution, such as a retail bank, virtual bank, credit
union or building society. Online banking is also
referred as internet banking, e-banking, virtual
banking and by other terms.

 Online banking or E-banking is an umbrella term for

the process by which a customer may perform
banking transactions electronically without visiting a
brick-and-mortar institution.

 Online banking is the practice of making bank

transactions or paying bills via the Internet. Thanks to
technology, and the Internet is particular, people no
longer have to leave the house to shop, communicate,
or even do their banking.

24
 2.2. HOW INTERNET BANKING
EVOLVED INTO MAINSTREAM
FINANCIAL TOOLS

In today’s highly technical world, it’s hard to imagine there was

once a time when all banking was conducted at an actual brick-
and-mortar financial institution. Even simple account transfers
required a trip into the bank.

While today’s online banking is filled with amazing

innovation, its hasn’t always been this easy-in fact it took a long
time to get this far.

 HISTRICAL DEVOLOPMENT;-
 The precursor for the modern home online banking
services were the distance banking services over
electronic media from the early 1980s. the term ‘Online’
became popular in the late ‘80s’ and referred to the use
of a terminal, keyboard and TV (or monitor) to access
the banking system using a phone line. ‘Home banking’
can also refer to the use of numeric keypad to send tones
down a phone line with instructions to the bank. Online
services started in New York in 1981 when four of the
city’s major banks (Citibank, chase Manhattan, Chemical
and Manufacturers Hanover) offered home banking
services using the videotex system. Because of the
commercial failure of videotex these banking services

25
 never become popular except in France where the use of
videotex (Minitel) was subsidised by the telecom
provider and the UK, wher the Prestel system was used.

 While financial institution took steps to implement in e-

banking services in the mi-1990s, many consumers were
hesitant to conduct monetary transactions over the web.
It took widespread adopted of electronic commerce,
based on trailblazing companies such as America Online,
Amazon.com and eBay, to make the idea if paying for
items online widespread. By 2000,80 percent of U.S.
bank offered e-banking. Customer use grew slowly. At
Bank of America for example, it took10years to acquire 2
million e-banking customers. However, a significant
cultural change took place after the Y2K scare ended. In
2001, Bank of America become the first bank to tom 3
million online banking customers, more than 20 percent
of its customer base. In comparison, larger national
institution, such as Citigroup claimed 2.2million online
relationship globally, while J.P. Morgan chase estimated
it had more than 750,000 online banking customers.
Wells Fargo had 2.5million online banking customers,
including small businesses. Online 2001, Bank of America
customers executed a record 3.1 million electronic bill
payments, totalling more than $1 billion. In2009, a report
by Gartner Group estimated that 47 percent of U.S adults
and 30 percent in the United Kingdom are using bank
online.

 Today, many banks are internet only banks. Unlike their

predecessors, these internet only banks do not maintain

26
 brick and mortar bank branches. Instead, they typically
differentiate themselves by offering better interest rates
and more extensive online banking features.

 FIRST ONLINE BANKING IN INDIA;-

In India, digital banking started taking shape
in the late 1990s with ICICI Bank being the first one to bring the
service to their retail clients. Digital banking became
mainstream only in 1999 as internet charges were reduced and
there was increased awareness and trust concerning the internet.
It was only after the internet further developed and the costs
came down, banks started serving a broader basket of products
online.

2.3 FEATURES OF ONLINE BANKING

With Internet banking services, you can conduct an array of
banking transactions. The prominent ones are as under.

 Check Account Balances & Statements

You can log into the internet banking account to check
your account balance at any time. You can check for recent
transactions or download statements from years ago.

27
 24x7 Fund Transfer
You can transfer money within the same or different banks
through internet banking via facilities like RTGS, IMPS,
NEFT, and UPI. You can also initiate overseas fund
transfers.

 Bill Payments & Recharge

You can pay various utility bills like electricity, landline,
gas, property tax, etc., and set up standing instructions for
automatic payments. You may also recharge your DTH and
mobile phone connection, pay credit card bills and loan
EMIs conveniently.

 Order Cheque Books & Cards

Another feature of internet banking is the provision to
place orders for new cheque books and bank cards. You can
apply for primary and add-on debit cards and credit cards
online and get swift delivery.

 Open deposit accounts

Banks also allow you to open fixed and recurring
deposits through the internet banking platform. You can
choose your preferred type of term deposit and tenure, and
earn higher interest rates than those provided on your
savings account.

 Apply for Loans

You can apply for personal loans, home loans, and auto
loans through the net banking portal. You can also access
28
 all the necessary information about the loan before sending
your loan application.

 Make Investments
Whether you wish to invest in mutual funds, bonds, shares,
or other market products, you can do so through internet
banking. You can also link your bank account to your
investment accounts for instant credit and debit of funds.

 Security
Banks take various measures to ensure you enjoy a secure
internet banking experience. Security features of internet
banking systems include multi-factor authentication,
virtual keyboard, spending limits and session timeouts. You
also receive SMA and email alerts when you log into the
internet banking platform to ensure your account is
secured from fraudulent activities.

 File Tax Returns

Some banks also allow you to file your income tax returns
on their internet banking platform. All you need to do is
log in, select the income tax e-filing option and file your
taxes

29
2.4. ADVANTAGES OF INTERNET
BANKING

30
The advantages of internet banking are as follows:

 Availability: You can avail the banking services round

the clock throughout the year. Most of the services
offered are not time-restricted; you can check your
account balance at any time and transfer funds without
having to wait for the bank to open.
 Easy to Operate: Using the services offered by online
banking is simple and easy. Many find transacting
online a lot easier than visiting the branch for the
same.
 Convenience: You need not leave your chores behind
and go stand in a queue at the bank branch. You can
complete your transactions from wherever you are. Pay
utility bills, recurring deposit account instalments, and
others using online banking.
 Time Efficient: You can complete any transaction in a
matter of a few minutes via internet banking. Funds
can be transferred to any account within the country or
open a fixed deposit account within no time on
netbanking.
 Activity Tracking: When you make a transaction at
the bank branch, you will receive an acknowledgement
receipt. There are possibilities of you losing it. In
contrast, all the transactions you perform on a bank’s
internet banking portal will be recorded. You can show
this as proof of the transaction if need be. Details such
as the payee’s name, bank account number, the
31
 amount paid, the date and time of payment, and
remarks if any will be recorded as well.

2.5. DISADVANTAGES OF INTERNET

BANKING

The disadvantages of internet banking are as follows:

 Internet Requirement: An uninterrupted internet

connection is a foremost requirement to use internet
banking services. If you do not have access to the
internet, you cannot make use of any facilities offered
online. Similarly, if the bank servers are down due to

32
 any technical issues on their part, you cannot access
net banking services.

 Transaction Security: No matter how much

precautions banks take to provide a secure network,
online banking transactions are still susceptible to
hackers. Irrespective of the advanced encryption
methods used to keep user data safe, there have been
cases where the transaction data is compromised. This
may cause a major threat such as using the data
illegally for the hacker’s benefit.

 Difficult for Beginners: There are people in India

who have been living lives far away from the web of the
internet. It might seem a whole new deal for them to
understand how internet banking works. Worse still, if
there is nobody who can explain them on how internet
banking works and the process flow of how to go about
it. It will be very difficult for inexperienced beginners
to figure it out for themselves.

 Securing Password: Every internet banking account

requires the password to be entered in order to access
the services. Therefore, the password plays a key role in
maintaining integrity.

CHAPTER-3
33
 DIFFERENT TYPES OF
INTERNET BANKING
3.1. CORE BANKING SOLUTION OR CBS
Core banking solution is an effective banking service that
benefits customers in manifold ways. Robust transactions,
improved document management, customer retention, and
proper safety and compliance process are among the primary
boons of core banking solutions.
Core Banking Solution or CBS is required to streamline the
banking process and cater to the dynamically fluctuating
market.
The sections below are the run-down of the particularities of
core banking solutions.

The major objectives of bank automation are better

customer service, flawless book keeping and prompt decision-

34
making that leads to improved productivity and profitability.
The concept of bank automation started in the year 1981, but it
was during the period 1984-1987 banks in India started the
branch level automation, making use of the then
available MSDOS based stand alone computers. This initiative
was taken by the banks on the basis of “First Rangarajan
Committee report” on bank computerisation submitted in the
year 1984. ALPMs (Advanced Ledger Posting Machines) were
the fashion in those days. However, the pace of bank automation
was very slow in the banks primarily owing to the lack of trade
union consensus on bank automation.

Another committee was constituted in 1988 under the

chairmanship of Dr. C Rangarajan, the then Deputy Governor of
RBI to slate down a perspective plan on automation of banks for
a five year period. This paved way to the implementation of
multi-user Total Branch Automation packages running on a
LAN (Local Area Network), either on a Netware or a UNIX
operating system. With the implementation of TBA, banks
started to offer the facilities of exclusive Customer Terminal,
Single window transaction, on-line and off-site ATMs, Tele-
Banking etc.

35
Advantages of Core Banking
Systems

 Real-time transaction processing: Cloud-based

modernized core banking systems process large volumes of
data quickly, eradicating delays and enabling real-time
transactions. This enhances customer experience and
boosts employee productivity.

 Enhanced Agility: Adopting a modern cloud platform

built on open-source standards can offer banks the agility
required while maintaining performance, reliability, and
security. This flexibility empowers banks to swiftly embrace
innovation, adapt to market shifts, and introduce new
products and services.

 Increased scalability: By deploying cloud-based core

banking solutions, banks can ramp up and down service
depending on the varying demands. For instance, during
36
 peak transaction periods, banks can swiftly tap into
additional IT resources via cloud computing, ensuring
efficient processing without delays.

 Reduced costs: Core Banking Systems facilitate

collaboration by streamlining banking operations, open
new avenues for revenue generation, enhancing data
efficiency by eliminating data redundancy, and heightening
data accuracy and security.

 Greater resilience: Aging hardware raises downtime risks

and costs. Cloud providers’ robust security and redundancy
resources reduce interruptions, ensuring business
continuity for banks with modernized core systems.
 24/7 banking access: The Core Banking System remains
operational 24/7. It allows users to perform financial
transactions and seek customer support assistance anytime,
anywhere.

 Robust cybersecurity: Cloud providers offer cutting-edge

security solutions like AI, biometrics, and more. Storing
data in the cloud reduces data breach risks and
cyberattacks for banks, enhancing overall security.

 Leverage open banking: A rising trend in finance, open

banking offers collaboration between traditional financial
institutions and fintechs, innovative tech access, improved
services, and higher customer engagement. To seize the
potential of open banking and other emerging trends,
institutions must adopt modern core banking systems.

3.2. ATM BANKING

37
ATM stands for Automated Teller Machine which is a self-
service banking outlet. You can withdraw money, check your
balance, or even transfer funds at an ATM. Different banks
provide their ATM services by installing cash machines in
different parts of the country. You can withdraw money from
any of these machines irrespective of whether or not you are an
account holder in the same bank.

ATM transactions are either free or bear a nominal charge

depending upon the banks. Banks usually do not charge for the
first 3-5 ATM transactions in a month. Once you cross the limit
of free transactions, you may have to pay a nominal charge. Also,
some banks levy charges if you withdraw money from the ATM
of another bank of which you are not an account holder.

38
3.3. DIGITAL WALLET
A digital wallet (or electronic wallet) is a financial transaction
application that runs on any connected device. It securely stores
your payment information and passwords in the cloud. Digital
wallets may be accessible from a computer; mobile wallets,
which are a subset, are primarily used on mobile devices.

Digital wallets allow you to pay when you're shopping using

your device so that you don't need to carry your cards around.
You enter and store your credit card, debit card, or bank
account information and can then use your device to pay for
purchases.

39
 Types of Digital Wallets:
There are several digital wallets available. Here are some of
the most well-known:

 Cash App
 Apple Pay
 Google Wallet
 Samsung Wallet
 PayPal
 Venmo
 AliPay
 Walmart Pay
 Vodafone M-PESA

3.4. DIGITAL CASH

40
Digital cash is a system of purchasing cash credits, storing the
credits in your computer or digital wallet, and then spending
them when making electronic purchases over the internet or in
person on a mobile device at the point of sale.

Digital cash allows individuals to make online transactions

using digital currency. It is designed to be a convenient and
secure alternative to traditional payment methods, such as credit
cards or cash.Examples of digital wallets include the following:

 Apple Pay
 Cash App
 Dwolla
 Google Pay
 PayPal
 Samsung Wallet
 Venmo
 Zelle

41
3.5. KIOSK BANKING

The Reserve Bank of India (RBI) defines financial inclusion as

the process of ensuring access to financial services and timely
and adequate credit where needed by vulnerable groups such as
weaker sections and low income groups at an affordable cost. In
the essence of financial inclusion, KIOSK banking is an
important concept and basically developed for rural areas of
country where less number of banks are and people can't reach
to the bank to use their services.
It is conceived that the kiosks will functions with the support of
leading banks in the private, public and cooperative sectors and
using the shops as a touch-point for basic banking services such
as cash deposits, withdrawals and remittances apart from micro-
credit and insurance. Like the ordinary bank branches, the
kiosks will offer all the basic services of banking.

42
3.6. NEFT
The NEFT or National Electronic Funds Transfer is an electronic
payment system that allows users to initiate direct one-to-one
payment anywhere across the country. One can send money to
the beneficiary only if he or she has a bank account with any
branch in the country. You can also do NEFT using online modes
like mobile banking and internet banking.
Features of NEFT:
 Availability: In accordance with the RBI guidelines, the
NEFT transfer facility is available round the clock

 No transaction charges: No transaction charges are

applicable if the payment is initiated through internet
banking or mobile banking app like ICICI Bank iMobile
Pay app.

 Minimum transaction limit: The minimum transaction

limit is Rs.1, and the maximum transaction limit is Rs.10
to Rs.25 Lakh (based on customer segment) if you are
doing it between 01.00 h?– 19.00 h? . At ICICI Bank, if you
are doing in 2nd & 4th Saturday, Sunday & RTGS
Holidays, the maximum transfer of funds is Rs.2 lakhs

 Nominal Charges: If you are doing the NEFT

transaction by visiting the bank brand at ICICI Bank, the
following nominal charges are applicable

43
 Transaction charges NEFT

Rs. 2.25 +
Payment up to Rs.10,000
Applicable GST

Payment Above Rs. 10,000 Rs. 4.75 +

and up to Rs. 1 lakh Applicable GST

Payment Above Rs. 1 lakh Rs. 14.75 +

and up to Rs. 2 Lakh Applicable GST

Payment Above Rs. 2 lakh Rs. 24.75 +

and up to Rs. 10 lakh Applicable GST

Benefits of NEFT:
 Accessibility: NEFT online transfer can be accessed 24*7
through ICICI Bank Internet Banking and iMobile Pay
App.

 Minimal Charges: This is the most cost-effective mode

of online transfer of funds as you don’t have to incur
much transaction charges.

 Transfer Funds across India: Through ICICI Bank’s

NEFT, you can initiate fund transfer pan India with a
large network of branches.

 Free Charges: ICICI Bank savings account customers do

not have to face any charges for online NEFT
transactions.

44
  Receive Confirmation: There is quick confirmation of
the transaction to both parties via SMS.

 Easy Payments: You can use NEFT for payment of loan

EMIs, credit card dues, among others.

3.7. RTGS
The term "real-time gross settlement (RTGS)" refers to a
funds transfer system that allows for the instantaneous transfer
of money and/or securities. RTGS is the continuous process of
settling payments on an individual order basis
without netting debits with credits across the books of a central
bank. Once completed, real-time gross settlement payments are
final and irrevocable. In most countries, the systems are
managed and run by their central banks.

45
3.8. IMPS

For transferring funds real time and 24X7X365 interbank was a

major challenge faced in banking industry. Only NEFT & RTGS
were available to user for fund transfer during banking hours.

With the above context in mind, NPCI conducted a pilot study

on the mobile payment system with the banks like SBI, BOI, UBI
and ICICI in August 2010. Also the banks like Yes bank, Axis and
HDFC bank joined this league in the month of September,
October and November 2010 respectively. Immediate Payment

46
Service (IMPS) public launch happened on 22nd November 2010
by Smt. Shyamala Gopinath, DG RBI at Mumbai and this service
is now available to the Indian public.
IMPS provides robust & real time fund transfer which offers an
instant, 24X7, interbank electronic fund transfer service that
could be accessed on multiple channels like Mobile, Internet,
Branch, ATM and SMS. IMPS is an emphatic service which allow
transferring of funds instantly within banks across India which is
not only safe but also economical. Currently on IMPS, 856
members are live which includes banks & PPIs.
The eligible criteria for the Banks who can participate in IMPS is
that the entity should have valid banking or prepaid payment
instrument license from Reserve Bank of India to participate in
IMPS.

47
3.9. MOBILE BANKING
Mobile banking is the act of making financial transactions on a
mobile device (cell phone, tablet, etc.). This activity can be as
simple as a bank sending fraud or usage activity to a client’s cell
phone or as complex as a client paying bills or sending money
abroad. Advantages to mobile banking include the ability to
bank anywhere and at any time. Disadvantages include security
concerns and a limited range of capabilities when compared to
banking in person or on a computer.

48
3.10. SMART CARD/STORE VALUE
CARD
A smart card (SC), chip card, or integrated circuit
card (ICC or IC card), is a card used to control access to a
resource. It is typically a plastic credit card-sized card with an
embedded integrated circuit (IC) chip.[1] Many smart cards
include a pattern of metal contacts to electrically connect to the
internal chip. Others are contactless, and some are both. Smart
cards can provide personal identification, authentication, data
storage, and application processing.[2] Applications include
identification, financial, public transit, computer security,
schools, and healthcare. Smart cards may provide strong security
authentication for single sign-on (SSO) within organizations.
Numerous nations have deployed smart cards throughout their
populations.

3.11. GREEN CHANNEL COUNTER

GCC stands for Green Channel Counter. The purpose of Green
Channel is to provide hassle free service to customers because

49
you don’t need to fill forms for doing transactions thus saving
your precious time and save paper to minimise cutting of trees
for green environment. On the other hand, bankers also do not
have to keep unnecessary pile of records in their record rooms.
Moreover, Green Banking is one of the steps taken by the Bank
for clean and green environment.

3.12. E-TICKETING
An e-ticket (electronic ticket) is a paperless electronic document
used for ticketing purposes, such as airfare or concert admission.

E-tickets are stored in a database and can be printed out at home

or at the ticket counter of the venue. This practice has become

50
an increasingly popular option for travel companies and event
venues because of its convenience, cost savings and
environmental friendliness.

Another advantage is that it eliminates the possibility of losing

entrance to a venue or a flight because of a lost paper ticket.

3.13. DEMAT SERVICE

The Demat full form stands for a Dematerialised Account.
Demat is a form of an online portfolio that holds a customer’s
shares and other securities. It has negated the necessity of
holding and trading physical share certificates.

A Demat account is used to hold shares and securities in an

electronic (dematerialised) format. These accounts can also be

51
used to create a portfolio of one’s bonds, ETFs, mutual funds,
and similar stock market assets.

Demat trading was first introduced in India in 1996 for NSE

transactions. As per SEBI regulations, all shares and debentures
of listed companies have to be dematerialised in order to carry
out transactions in any stock exchange from 31st March 2019.

o What is dematerialization?
The process by which the physical share certificates of a
company are converted to an electronic form is what is
commonly known as the dematerialization of shares. These
dematerialized shares are then held in an online Demat
account that you open with a depository. In the current context
of stock trading, share dematerialization is mandatory in order
to be able to sell or transfer your shares to another account.

52
 Previously, shares were held in physical
formats, proving a challenge to maintain over time. Paper gets
frayed, and since the world has gone online in most aspects of
life, why not the investment arena and share markets too?
Dematerialization has made investing easy, and you can easily
open a Demat account with a bank or a good brokerage.
Moreover, as all accounts are electronic, Demat accounts are
linked to bank accounts and trading accounts to make trading
transactions (the purchase and sale of shares) smooth and
seamless. Since investing in stocks is done mainly when lucrative
opportunities present themselves, Demat accounts serve the
purpose of quick actions with joint trading accounts and bank
accounts.

3.14. E-TAX & E-FILING

Under the new e-Pay Tax service, the entire chain of activities
related to payment of direct taxes, from generation of challan
(CRN) to making payment and recording of the payment
history is enabled through the e-Filing portal (Home | Income
Tax Department) for Authorized Banks. Filing of Form
53
26QB/26QC/26QD/26QE is also available under this
functionality.

Taxpayers are offered wide range of modes for payment,

including Net Banking, Debit card, Pay at Bank Counter
(Over the Counter) in the new functionality. Taxpayers are
also given the option to use RTGS/NEFT & Payment Gateway
(Net Banking, Debit Card, Credit Card & UPI) modes to make
payments through banks which are not authorized to directly
collect the taxes. To make payment using this functionality,
Challan (CRN) is mandatorily needed to be created on the e-
Pay Tax Functionality of the e-Filing Portal. Moreover, CSI
(Challan Status Inquiry) facility has been added in the e-Filing
portal. TAN users can download the CSI file in Pre login Using
quick links and Alternatively, in Post-login, users can go
to CSI File download Tab and download the CSI file for tax
payments made through the e-Pay Tax service at e-Filing
Portal.

54
 3.15. ONLINE DEMAND DRAFT
Demand Draft is a type of negotiable instrument which is
used for payments. With the rapid increase in the
advancement of technology, many people these days usually
use money transfer options like NEFT, RTGS, or IMPS online
transfer for making payments. Nowadays, many conventional
instruments are losing their importance but demand draft is
one such instrument that is still very much in practice and
use. SBI demand draft is still used by many institutions like
schools, colleges, the examination conducting centres, etc. for
their application or admission procedure. SBI demand draft is
one of the safest ways to carry out financial transactions.

3.16. OTHER E-SERVICES

55
 CHAPTER-4
SECURITY ISSUE OF NET
BANKING

56
4.1. INTERODUCTION
We now rely even more on the internet as technology develops.
Everything we do, including work, leisure, shopping, and
banking, can be done online. Daily duties are now much simpler
thanks to the internet.

However, technology has also played a role in the significant rise

in cybercrime that has occurred globally. There are noticeably
more instances of online banking fraud in India as more Indians
increasingly conduct transactions online.

You can conduct financial transactions with internet banking.

Online banking is sometimes referred to as web banking or
Internet banking.

Online banking provides users with nearly all of the services that
are typically provided by a neighbourhood branch, including
deposits, transfers, and online bill paying.

Even before the pandemic, banks had already drawn a number of

consumers to their digital platforms. This revolutionary process
was, however, being hampered by client reluctance and worries
about the hazards associated with digital banking. Digitech's
uptake was increased by COVID-19. Both the payment and
lending sectors of banking are currently thriving with digital
products and services. On the one hand, we observe adoption
and technological advancements proliferate and risk enters the
picture.

4.2. TYPES OF FRAUDS

57
10 Common Internet Banking Frauds:-
Here are the top 10 most common types of online frauds in
banking services that one needs to be aware of:

1) Identity Theft
Identity theft is one of the most common forms of Internet
banking fraud. Here, cybercriminals steal personal information
such as usernames, passwords and other confidential data to
impersonate the victim.

2) Malicious Software
Malicious software, also commonly known as malware, is
software that is designed to infiltrate or damage computer
systems. Malware can be used by fraudsters to gain unauthorised
access to the net banking credentials of a person.
3) Employee Initiated Fraud
Employee-initiated fraud is a type of net banking fraud where
employees of a financial institution misuse their access to
sensitive information and banking systems for personal gain.
They can use this information to conduct embezzlement, insider
trading and other forms of fraud.

4) Fraudulent Email (Phishing)

Phishing is a common tactic used by fraudsters to trick
individuals into sharing their personal information. This is
usually done through fraudulent emails that appear to be from
legitimate financial institutions. They ask for confidential
information such as usernames, passwords and account
numbers.

5) e-Transfer Interception Fraud

e-Transfer interception fraud occurs when cybercriminals
intercept and redirect legitimate e-transfers intended for a
victim's bank account to their own account. They may use
various tactics, such as social engineering, malware or hacking.
58
6) Vishing
Vishing is another common online banking fraud where
cybercriminals use voice calls to deceive victims into sharing
their personal information. The fraudster usually represents
themselves as an executive from a legitimate financial institution
and asks the victim to provide their confidential information
over the phone.

7) Opening an Account in the Victim's Name (Application

Fraud)
Application fraud is a type of Internet banking fraud where
cybercriminals open bank accounts in the victim's name without
their consent. They may use stolen identities and other
fraudulent documents to open these accounts. These bank
accounts are then used for illegal activities such as money
laundering or transferring stolen funds.

8) SIM Swap
SIM swap is a type of e-banking fraud where cybercriminals trick
a victim's mobile service provider into transferring the victim's
mobile phone number to a SIM card in their possession. Once
they have control of the victim's phone number, they can use it
to bypass two-factor authentication measures. Through this,
they gain unauthorised access to the victim's online banking
accounts.

9) Automatic Transfer System (ATS)

ATS is a serious type of online banking scam that increases
financial losses over time if not rapidly solved. Here, fraudsters
set up automatic transfers to their own accounts without the
victim's knowledge or consent. These automatic transfers may
occur at regular intervals automatically.

10) Fake Apps

59
Fake applications are malicious application copies that are
designed such that they mimic legitimate banking apps. These
fake applications deceive users into providing their personal
information. They are often downloaded from unofficial app
stores or websites. In most cases, they contain malware or other
malicious software.

4.3. STEPS TO SECURE INTERNET

BANKING

60
7 Tips for Safe Online Banking

With banks improving their security, fraudsters are also coming

up with innovative ways to trap victims. If you regularly use
online banking, here are a few safe banking tips that are sure to
help:
1. Selecting a strong password
Your online banking password should be alphanumeric and a
combination of uppercase and lowercase letters. Add some
special characters to it, and you will have a password that would
be almost impossible to crack.
Never use common phrases or words as your password. This
means that your name, pet name or date of birth should be
avoided. Also change the password regularly for better safety.
2. Never share your password
A strong password is only useful as long as no one gets access to
it. So, make sure that you never share your banking password
with anyone. Also, many people have a habit of storing their
password in their computer/laptop or mobile phone.

61
If at all your computer/laptop is hacked or mobile is stolen,
someone can easily get access to your online banking password.
So, make sure that you remember your password and never write
it down anywhere.
3. Avoid phishing e-mails
Phishing is now one of the most popular types of online banking
frauds. Fraudsters send you an e-mail which appears to have
come from your bank or other reputed websites. These e-mails
generally have a link that you are asked to follow. Once you click
on the link, you will be redirected to a page where you will be
asked to enter your banking details.
Know that no bank will ever send such e-mails where they will
ask you to provide your banking details. Avoid such e-mails as
you can be an easy victim of a phishing scam.
4. Use your own computer/laptop
For online banking security, make sure that you always use your
own PC/laptop for online transactions. Public computers are not
safe and can provide someone access to your online banking
account.
Similarly, use a trusted internet connection for such
transactions. Public Wi-Fi and hotspots are prone to hacking
and should be avoided for banking transactions.
5. Use licensed Anti-Virus software
To protect your PC from virus attacks, it is also vital to invest in
a licensed anti-virus software. Free antivirus software is not as
powerful and cannot protect your computer from newer viruses.
You should keep your operating system up-to-date to prevent
hacking and other fraudulent activities.

62
6. Register for account notifications
Most of the banks now offer account notifications through e-
mail and SMS. Register for this service to receive alerts for every
debit and credit transaction. This will make it easier for you to
monitor the transactions.
If at all your account details are compromised, the notification
will alert you if there has been any unauthorised transaction.
You can then instantly get in touch with your bank to get the
account blocked.
7. Type the URL of your bank
Rather than following any links for online transactions, prefer
typing the bank URL in the address bar of the browser.
Once you reach the online banking page of your bank, check
whether it has an "https" prefixed in the URL. The prefix
indicates that the communication between the website and the
browser is encrypted and secure. Genuine sites feature this
prefix.

4.4. TEN STEPS TO MINIMIZE SECURITY

63
Here are 10 ways to protect your personal and financial
information when banking online. Most are easy to implement,
providing a solid defense against hackers:
1. Password-protect all banking access
Make sure to password-protect any computer or device you use
for online banking. This includes desktops, laptops, tablets, and
mobile phones. If it contains access to or information about your
bank, ensure it is locked when you are not using it.

2. Choose strong and unique passwords

The passwords you choose for your device and for online or app
access to your bank accounts should be strong (a random mix of
eight or more characters) and unique. Do not reuse the same
password for multiple devices or accounts. Consider using a
password manager that creates unique passwords for you and
stores them so you don’t have to write everything down.

3. Enable two-factor authentication

If your bank or credit union offers multi-factor authentication,
use it. Multi-factor, or two-factor, authentication requires the
use of two pieces of information—such as a password plus a
numerical code you obtain through text or email—when you log
in.

4. Log out when you finish banking

You wouldn’t deposit a check at a traditional bank and then
stand around offering to withdraw money for anyone who wants
it. That’s almost exactly what you are doing if you leave a device

64
logged on to your bank account, especially if you have also failed
to password-protect the device. Log out of your bank account
when you finish. Every. Single. Time.

5. Avoid public Wi-Fi

It may be convenient to deposit a check or transfer money while
having a latte at your favorite coffee shop, but it may not be
secure. Hackers can “eavesdrop” from a nearby table. You may
accidentally use a criminal hotspot and malware may find its
way onto your device. If you have no choice but to use public wi-
fi, make sure the site’s URL begins with “https,” a security
feature, or consider setting up a virtual private network (VPN)
through your mobile device or laptop.

6. Don’t use a shared computer

Worse than banking while logged on to public wi-fi is doing it
on a shared computer, such as those found in a library or
business center of a hotel. All of the above cautions apply, plus
you may not have permission to set up a VPN. When it comes to
online banking, only do so from a device that only you use.

7. Sign up for banking alerts

Online banking sites let you set up alerts when certain things
occur such as a withdrawal or transfer above a certain amount,
account balance, transactions, password changes, failed logins,
and more. Alerts typically come in the form of an email or text
message. If you receive an alert to an activity you did not
authorize, contact your bank or credit union immediately while
simultaneously changing your password.

65
8. Guard against phishing scams
Phishing is a scam that tries to trick you into revealing personal
information, typically by using a text or email message that
appears to come from your bank. Avoid clicking on email or text
links unless you know the message came from your bank. Don’t
guess. If you’re not sure, call the bank or go to the known
website and logon to see if the message appears there. You can
also hover over any links to see where the link would take you.

9. Choose trustworthy financial apps

If you use mobile apps for banking make sure they came from
your bank or credit union. Only download them from trusted
sites such as the bank’s website, the App Store or Google Play.
Before downloading, check developer details and read reviews.

10. Report lost or stolen cards immediately

If your credit or debit card, or device, is lost or stolen, contact
your bank or credit union immediately. The sooner you make
contact, the sooner protection kicks in and your liability
becomes zero.

66
 CHAPTER-5
INTERNET BANKING IN
INDIAN-GUIDELINES BY
RBI

5.1. GUIDELINES TO RRBs

Please refer to our circular DBOD

No.Comp.BC.130/07.03.23/2000-01 dated June 14,
2001 in terms of which banks were advised to seek prior
approval of Reserve Bank of India before offering
transactional services on the Internet. The position has
since been reviewed and banks are advised that while
the offering of Internet Banking services will continue
to be governed by the provisions of the above circular,

67
no prior approval of the Reserve Bank of India will be
required for offering Internet Banking services.

2. Banks should, however, ensure compliance with

the following conditions:

a. The Internet Banking policy has been approved by

the Bank's Board.

b. The policy fits into the bank's overall Information

Technology and Information Security policy and
ensures confidentiality of records and security systems.

c. The policy takes into account operational risk.

d. The policy clearly lays down the procedure to be

followed in respect of 'Know Your Customer'
requirements, and

e. The policy broadly meets the parameters laid down

in our above circular.

3. Please acknowledge receipt.

5.2. AUTHENTICATION PRACTICES TO

INTERNET BANKING

68
Successful authentication occurs when an individual presents
evidence or proof that confirms a previously established identity.
For example, if you moved to a new country, to establish
residency you might have to present a number of documents
that identify you. Once these documents have been scrutinized
and found to be in order—part of a process called enrollment—
you might then be issued an official government ID card for
future use. This process of producing documents to prove an
identity is commonly referred to
as identification. Authentication occurs when you are later asked
to produce the official ID card, such as when cashing a check—
the ID card authenticates you as having been previously
identified.

Bankers can accomplish and manage authentication easily with

face-to-face customer interaction; however, authenticating a
disparate customer base remotely connecting to Internet
banking platforms using traditional physical security tools
presents certain challenges:

69
  The distribution of software, hardware, cards, and other
authentication-enabling technologies to a large Internet
banking customer base is generally expensive to implement
and administer.
 Banking customers are generally not receptive to paying
security-related fees or enrolling in and installing security
software and hardware on their home computers.

The difficulty and expense of implementing authentication

standards typically increase proportionately with the strength
and reliability of the solution. For instance, passwords present
fewer challenges than fingerprint scanning. Authentication
methodologies generally rely on one or more of the following
three factors:

 Something you know (e.g., password)

 Something you have (e.g., ATM card)
 Something you are (e.g., fingerprint)

Requiring one of these factors to authenticate an individual is an

example of single-factor authentication. Passwords are perhaps
the most commonly used single-factor authentication
methodology. Multifactor authentication consists of using two
or more factors together. Using an ATM card is a common
example of multifactor authentication—the card is something
you have, and the personal identification number (PIN) is
something you know. Both are required to complete a
transaction. The use of two authentication factors in ATM
transactions is considered strong authentication.

70
 CHAPTER-6
INTERNET BANKING
SCENARIO WITH INDIAN
ECONOMY
6.1. INTERNET BANKING SCENARIO
Digital banking in India is expected to grow with a CAGR of
23.1% from 2022 to 2030. NBFC growth is also estimated to hit
$5 trillion in 2024. E-Banking existed as an additional service
before COVID-19. However, after the pandemic, globally, the
concept of Internet banking has changed. Indian banks have
achieved phenomenal growth by adopting digital
technologies. Banks hope to have a multi-dimensional
relationship with customers to improve banking services.

71
Upcoming Digital Banking Trends:- As digital banking
continues to grow, it opens up new opportunities to reach the
underserved market. Rural India has numerous small
businesses and cottage industries that can thrive well with
futuristic funding options. However, it was difficult for banks
to reach out to those consumers. The following digital
banking trends will bring financial services and products
closer to the rural parts of the country as well:
Mobile Banking:- According to a study, 89% of consumers
use mobile banking services. Mobile wallets are also
increasingly adopted by rural India due to the widespread
growth of digitisation. Security is often a major concern for
mobile banking users. Mobile banking has reached 5X growth
compared to online banking. Mobile banking will gain even
more popularity as the number of millennials and Gen Z
customers increases.

6.2. INTIATIVE TAKEN BY THE

GOVERNMENTOF INDIA
i. RBI conducts Electronic Banking Awareness and Training (e-
BAAT) programmes through its regional offices to create
awareness about digital payments and target audience includes
72
rural area population. The focus of this training includes topics
on safe practices while using digital payment products, Cyber
hygiene, customer protection, grievance redressal mechanisms
etc. The target audience includes cross section of the society
consisting of bank staff, customers, government officials,
students, Self Help Groups, farmers, shopkeepers, traders and
the common man. From 2019 till date, a total of 869 e - BAAT
programmes were conducted by various Regional Offices of RBI.
ii. RBI has been also carrying out multi-channel public
awareness media campaigns under the aegis of ‘RBI Kehta Hai’
by television, radio, online, SMS and social media posts, whereby
public is sensitised about how to be vigilant while using digital
products such as mobile banking, ATMs, internet banking, etc.,
and how digital frauds could be averted. iii.RBI has carried out
multi-lingual media campaigns on themes like ‘Convenience of
Digital Banking’, ‘Switch On / Off and Setting Transaction
Limits’ facility for card transactions, and ‘Safety of Digital
Banking’ among others, through various advertisements issued
in major newsprints. iv.Centre for Financial Literacy (CFL)
project: To have an exclusive focus on financial literacy at the
block level through brick and mortar Centres, CFLs have been
set-up by RBI at the block level. A total of 1107 CFLs have been
set up across the country as on June 30, 2022. Awareness about
digital banking is one of the areas covered under the CFL
project. Initiatives taken by Banks: i.Financial Literacy Camps
(FLCs): Banks have been advised to conduct special camps
through their FLCs (2 camps per month on “Going Digital”
through UPI and *99# (USSD) including tailored camps for
different target groups viz., farmers, Micro and Small
entrepreneurs, school children, Self Help Groups and Senior
citizens. ii.Rural Branches of banks are required to conduct one
camp per month covering all the messages that are part of

73
Financial Awareness Messages (FAME) booklet and the two
digital platforms UPI and *99# (USSD). iii.Banking
Correspondents (BCs) led initiative: A strong network of about
5.2 lakh BCs, representing the last mile connect in the Banking
Services delivery system is also creating awareness while
facilitating transactions in the rural areas, because of their
familiarity with the Local/ Rural population.

CHAPTER-7
A CASE STUDY OF
INTERNET BANKING
PRIFILE OF THE SURVEYS:-

74
7.1. DATA ANALYSIS AND
INTERPRETATION

75
The Data Interpretation and Analysis section of
the banking exam is crucial as it assesses a candidate's capacity
to analyze and interpret complex data sets. Furthermore, this
skill is vital for banking professionals who make informed
decisions based on financial data.

Moreover, banks handle large amounts of data, including

customer data, transaction data, and market data, making the
ability to analyze and interpret this data essential for effective
decision-making.

76
Furthermore, the Data Interpretation and Analysis section in
banking exams evaluates a candidate's mathematical aptitude,
problem-solving skills, and logical reasoning ability.

The section tests a candidate's proficiency in working with

different types of data sets, such as graphs, tables, and charts,
and interpreting them accurately.

Given the high level of competition in banking exams,

candidates who perform well in the Data Interpretation and
Analysis section can significantly increase their chances of
securing a job in the banking sector.

Thus, it is crucial for candidates to prepare thoroughly for this

section and hone their skills in data analysis and
interpretation.

CHAPTER-8
FINDINGS, CONCLUSION
AND RECOMMENDATION

77
8.1. FINDINGS:-

78
79
8.2. CONCLUSIONS
In conclusion, e-banking services have revolutionized the way
we manage our finances. With the convenience of being able to
access banking services from anywhere with an internet
connection, e-banking has become a popular choice for many
individuals and businesses.
The benefits of e banking services are numerous, including the
ability to access your account 24/7, lower fees, higher interest
rates, and the ability to easily track your spending.
Additionally, many e-banking services now offer advanced
features such as budgeting tools and investment advice, allowing
individuals to take control of their finances and make informed
financial decisions.
The evolution of technology has played a major role in the
development of e-banking services, with advancements such as
mobile banking, social banking, and digital wallets. The use of
artificial intelligence and machine learning has also helped to
improve the customer experience, personalize banking services
and detect fraudulent activities.
There are several types of e banking services available, each
offering different features and benefits. Some common types of
e-banking services include online banking, mobile banking,
social banking, and digital wallets.
In summary, e-banking services offer numerous benefits, from
convenience to advanced features and technology. It is
important for individuals and businesses to understand the
different types of e-banking services available to them and
choose the one that best suits their needs.
With the continued advancement of technology, we can expect
e-banking services to continue to evolve and revolutionize the
way we manage our finances.
80
8.3. RECOMMENDATION
It’s no secret that bank customers are increasingly turning to
online and mobile banking platforms for their day-to-day
banking needs. As these platforms continue to expand and new
services come on line, banks should pay special attention to the
agreements and terms and conditions governing the relationship
between the bank and its customers. Below are five issues for
your bank to consider when designing the terms and conditions
governing your online and mobile platforms.

1. Create a Comprehensive Agreement that is Easily

Adaptable
On the consumer side, many banks are moving towards one
agreement that includes both general terms for online and
mobile banking and specific terms for certain services such as
bill pay, person – to-person, and account-to-account
transactions. The one-agreement approach allows bank
customers to agree to terms and conditions for all services at the
time of enrollment, as opposed to each time the customer
initiates a specific service included in online or mobile
banking. However, some third-party service platforms require
consumers to agree to specific terms at the time of service
enrollment, which may force the bank to include terms in
a separate agreement. As a result, when banks purchase new
services or switch to a new online or mobile platforms they can
find themselves having to overhaul their online banking
agreements. To address this issue, specific service terms should
be located in separate “stand-alone” sections at the end of the
agreement. This makes it easier for your bank to include new
service terms or transfer existing terms into separate documents
if required to accommodate a new platform.
81
The one-agreement approach is more difficult to implement for
business customers. Many business services available through
online and mobile banking, such as wire
transfers, ACH origination and remote deposit capture, require
in-depth terms and conditions that are better addressed by
separate agreement. Additionally, business customers are more
likely to not sign up for all available services at the time of
enrollment. In the business context, we often suggest that banks
create a master agreement with addendums governing specific
services. The master agreement includes general terms for all
services available through online and mobile banking, including
service availability, cut-off times, available functions, limits on
liability and indemnification responsibilities. Each specific
service addendum incorporates the terms of the master
agreement, and includes additional terms related to the specific
service.

2. Ensure Business Agreements Are Accepted By

Authorized Individuals
When entering into online and mobile banking agreements with
business customers, your bank needs to confirm that the
individual signing on behalf of the company has the requisite
authorization. Often, banks require a wet signature on such
agreements along with a signed corporate resolution to confirm
that the individual signing has proper authority. However, many
banks wish to allow their business customers to electronically
enroll in new or additional services, either for convenience, or
because the software platform requires the customer to enter
into new terms at the time of enrollment. One way to address
this issue is to obtain a wet signature on the master agreement,
and then include provisions in the master agreement that: (a)
identify those individuals that will have access to services
82
available through online banking; and (b) specifically authorize
those individuals to accept terms for new or additional services
on the company’s behalf.

3. Understand the Applicable Regulatory Framework

There are a number of federal banking regulations that your
bank will need to address in its online and mobile banking
agreements. Compliance reviews of these agreements during
exams are increasingly common and regulators continue to
publish guidance on these issues. Below are some of the more
common regulations that should be addressed in online and
mobile banking agreements.
E-SIGN. Reliance on electronic versions of disclosures related to
loans, deposit accounts or banking services triggers
E-SIGN consent requirements. The E-SIGN consent is typically
included at the beginning of a consumer online and mobile
banking agreement.
Regulation E. Regulation E disclosures are required in consumer
online and mobile banking agreements that
govern EFT transactions. Under Regulation E, your bank must
make disclosures at the time a consumer contracts for
an EFT service or before the first EFT is made involving
a consumer account. When drafting agreements, your bank
should consider the point at which a customer is “contracting for
a service”, and whether new Regulation E disclosures need to be
provided at that time. Also, remember that under Regulation E,
certain adverse changes require at least 21 days’ advanced notice.
Regulation DD. Regulation DD applies to mobile deposits to
individual accounts. Before adding mobile deposit features, your
bank should send 30 days’ advance notice to existing customers

83
if the mobile deposit service adds new transaction limits or fees.
Such limits and fees should also be incorporated into your
account disclosures and clearly described in your mobile deposit
terms and conditions.
Regulation CC. Certain provisions of Regulation CC apply to
mobile deposit services. The general consensus is that the funds
availability provisions of Regulation CC do not apply to images
of the type transferred through mobile deposit. Therefore, it is
important to include the mobile deposit funds availability terms
in your bank’s mobile deposit terms and conditions and the
bank’s funds availability policy. Terms and conditions should
also address Regulation CC’s requirement to pay interest on
funds deposited with mobile deposit upon receipt of credit.

4. Accurately Describe the Terms of Service

It is important for your bank to have a clear understanding of
how the bank’s online and mobile banking services work in
practice. Terms and conditions should accurately describe the
services and bank and customer responsibilities. An inaccurate
description of a service, lack of clear disclosure or
a misstatement of a party’s responsibility under the agreement
can expose the bank to liability and may trigger UDAAP or other
regulatory concerns. For example, in 2016, the FDIC Chicago
Region raised concerns that lack of clarity on terms of service
related to collection practices could result in consumer
harm. Ask your vendors to provide a detailed user guide for each
service so you can confirm that the services are accurately
described in your bank’s terms and conditions.

84
5. Review (And Revise) Vendor-Provided Terms and
Conditions
It is common for vendors to provide terms and conditions for
the services they offer. Some vendors provide templates for the
bank to modify, while others provide specific terms that the
bank is required to use and allow only limited
modifications. You should always review vendor-provided terms
and conditions to ensure that they are consistent with your
bank’s current agreements, include required regulatory
disclosures and do not include terms that regulators may find
objectionable. Many vendor-provided terms do not include
certain terms to protect the interest of your bank, such as
limitations on liability, customer indemnification
responsibilities, choice-of-law and venue and limited
warranties. Avoid accepting statements that the agreement is
“standard” or “used with all our customer banks.” When
possible, a prudent approach is to incorporate vendor terms and
conditions into your own agreement to ensure compliance and
consistency.

 RECOMMENDATION TO BANK:-
Today, banks play an important role in the payment and
settlement system of financial transactions. The introduction
of liberalisation measures in the banking sector and the
emergence of new private sector and foreign banks equipped
with latest technology, led to an increase in competition in
the banking sector. Technology up gradation is taking place in
public sector banks PSBs in a phased manner.

85
 Computerisation is increasingly being
applied in day to day deposits and loan operations, but the pace
at which it has moved so far, has been somewhat limited.
Moreover, there is a need for computerisation in a large number
of areas of operations of banks, with customer service as the
main focus.

To further upgrade the existing technology in the banking sector

and also to suggest measures for implementation, the Reserve
Bank appointed a Committee on Technology Up gradation in the
Banking Sector. The Committee in its report, submitted in July
1999, recommended a new legislation on electronic-funds-
transfer system to facilitate multiple payment systems to be set
up by banks and financial institutions.

The major recommendations of the committee are

summarised as follows:

1. Communication infrastructure and usage of INFINET

2. Standardisation and Security
3. Computerisation of Government Transactions
4. Data Warehousing, Data Mining and Management
Information System
5. Legal Framework for Electronic Banking
6. Other Related Issues
7. Issues Relating to Human Resource Development
8. Sharing of Experiences on Technology Implementation

 RECOMMENDATION TO USERS:-

86
 20 years ago, Jakob Nielsen posited that personalization was
overrated, primarily because technology was not sufficiently
advanced to create good predictions for what users cared
about. Fast forward to today, and (as he predicted)
personalization is a growing trend on the
web. Individualized personalization, as opposed to role-
based personalization, refers to the practice of tailoring
content and functionality to a specific user, based on data
gathered about that user’s preferences and behaviors.
 While personalized user interfaces can include anything from
command shortcuts to color schemes, a particularly useful
form of individualized personalization is the use
of recommendations on websites and mobile apps.
Recommended products or content items are particularly
common on ecommerce sites, social media, news sites, and
streaming video or music services, but can also be found on
other genres of sites. So, while a service like YouTube may
offer millions of videos, any given user will only be shown a
handful of recommended videos and channels when visiting
the site’s homepage or after watching a video, based on
gathered data about that user.
 Individualized recommendations can be based on machine
learning or other artificial-intelligence techniques,
explicit customization instructions from the user, or some
combination of both.
87
 To gain insight into users’ expectations and mental models
around the many types of individualized recommendations
offered on sites, we ran a remote moderated usability study
with 8 participants located across the United States. In each
session, participants completed facilitator-assigned tasks on
2–3 websites on which they had accounts and also answered
recommendation-related questions in an interview.
 Our study participants were highly attuned to the fact that
sites commonly track their browsing patterns, purchase
histories, and other sources of data to present individually
personalized suggestions. Overall, these recommendations
were appreciated and seen as instrumental for narrowing
down the options available on a site. To reap this benefit,
users were willing to sacrifice some privacy; they expected
many of their actions to be tracked and analyzed.

CHAPTER-9

88
 BIBLIOGRAPHY
9.1 WEBSITE
 www.google.com
 www.wikipedia.in
 www.slideshare.net
 www.scribed.in
 www.vikaspedia.in
 www.investopedia.com
 www.yahoo.com
 www.sbionline.com
 www.rbi.org.in
 www.linkedin.com
 www.rbi.in

9.2. BOOKS
 An Introduction to E-Commerce:- written by
Ramit Kumar Roy & Debasri Dey and published
by the Elegant Publication.
 E-Commerce:- written by Prof.(Dr.) Dilip Kumar
Chakraborty & Prof. Debdulal Chatterjee and
published by B.B. Kundu Grandsons.
 Introduction to Information Technology & its
Business Application:- written by A.K
Mukhopadhyay & A. Das and published by
Kalimata pustakalya.

89